Thousands of state schools are set to receive a funding boost
next year as the VAT break historically enjoyed by private
schools ends on New Year's day (1 January 2025).
The core schools Budget will increase by £2.3 billion next year
and the VAT change will raise £1.5 billion next year, rising to
£1.7 billion a year by 2029/30.
The Prime Minister's Plan for Change has set out the priorities
for government funding which includes giving children the best
start in life, as a key milestone within the Opportunity Mission.
As part of this Mission, the government is committed to hiring
6,500 new teachers, driving up standards and improving the
Special Educational Needs and Disabilities system.
Through the introduction of 20% VAT to all education services,
vocational training and boarding services provided by UK private
schools, the government is raising revenue which can help the 94%
of school children who attend state schools and deliver on its
mission to break down barriers to opportunity.
Chancellor of the Exchequer, , said:
“It's time things are done differently. Ending the VAT break
for private schools means an additional £1.7 billion a year that
can go towards our state schools where 94% of this country's
children are educated.
“That means more teachers. Higher standards. And the best
chance in life for all our children as we deliver
on our Plan for Change.”
Education Secretary said:
“High and rising standards cannot just be for families who
can afford them, and we must build an education system where
every child can achieve and thrive.
“Our ambitious Plan for Change sets out our clear mission to
break the link between background and success and ending the VAT
break enjoyed by private schools will provide much needed
investment in our state schools, to help recruit and retain
expert teachers."
The policy sets out that any fees paid from 29 July 2024 – when
the policy was first announced by the government – relating to
the term starting in January 2025 onwards will be subject to VAT.
This is expected to raise £1.5 billion in 2025-26, rising to £1.7
billion by 2029-30.
Where a private school in England has charitable status, the
government will also remove their eligibility to business rates
charitable rate relief from April 2025. The business rates change
will raise around £140 million per year, bringing the total
raised by these policies to £1.8 billion a year by 2029/30.
With the change coming in on New Year's Day, the Chancellor
visited the Harris Academy state school in London alongside
Education Secretary to talk to students and
teachers about the government's education priorities, including
£1 billion for the Special Educational Needs and Disabilities
system, increasing per pupil funding in real terms and taking
core schools funding to £63.9 billion in 2025-26.
